I wrote about the Credit Fail and my personal experience with the broken credit card market. It looks like things are bad enough that Paulson is going to come in with his government-sponsored credit card with the 700B limit.
Hey, don’t forget that Visa’s IPO was a MAJOR windfall for the banks that held the company.
… the offering will generate a windfall for Visa’s thousands of member banks, which own the company. JPMorgan Chase is expected to reap about $1.25 billion, while Bank of America, National City, Citigroup, U.S. Bancorp and Wells Fargo are likely to receive several hundred million dollars each.
So essentially, Wall Street banks took Visa public and made a killing off of the shareholders (general public.) Now the government is going to take public funds and bail out Visa. And Mastercard.
American Express is ahead of the curve, they recently won approval to convert to a commercial bank. Essentially, this now gives them access to the Fed’s discount lending facilities. In normal market circumstances, this would be looked down upon as a “bailout”. It’s not like anyone is going to be willing to put a term deposit into AMEX when they are simultaneously borrowing money from the discount window.
This industry is desperately in need of better management. With every single member of the current oligopoly in financial distress, it would make a great time to start up a financially-stable creditcard company.
